When the economy is down and your budget is slashed, you might be forced to prove every investment. Your CEO or manager might want to see the ROI of every effort — from direct mail to responding to comments.
And who can blame them, really? Times are tight. All signs are pointing south. They want to make sure that money isn’t being wasted. You might feel the same way: you don’t want to waste part of a shrinking budget on anything that’s not guaranteed to work.
But that might not be the best way to market. Alan Scott, CMO, Dow Jones certainly doesn’t think so. Scott’s strategy is to measure every investment and interaction with the customer that he can, and to make sure overall revenue numbers are solid, he says. Getting too granular in your ROI analysis can become a distraction.
“It’s very difficult to understand the cause and effect of every individual component and make a meaningful decision,” he says. “I heard at a conference not too long ago, someone said ‘What’s the ROI of putting on pants?’ Your probably could calculate it somehow. But you have to do it [anyway].”
That’s a great line: “What’s the ROI of putting on pants?” Remember it when you’re thinking of changing a successful marketing plan just because you cannot calculate the return on every portion of it. If it works overall, why change it? Granted, it’s worth the time and effort to tweak and test, but don’t slash and burn your pants because you’re not sure how much money they make.